BitMEX exchange co-founder Benjamin Delo was yesterday sentenced to 30 months probation by a New York federal court for violating the anti-money laundering Banking Secrecy Act, according to The Wall Street Journal.
The sentence concludes Delo’s part in the BitMEX legal saga, which has been ongoing since October 2020. Delo will return to his wife and home in Hong Kong “potentially within days,” where he will serve his probation.
Back in February, Delo and former BitMEX CEO Arthur Hayes pleaded guilty to “willfully failing to establish, implement and maintain an Anti-Money Laundering (AML) program.”
In May, Delo, along with co-founders Samuel Reed and CEO Arthur Hayes, were ordered to pay $10 million each by the Commodity Futures Trading Commission (CFTC) for violating AML laws. Delo paid his part in full.
Federal prosecutors charged the trio with having failed to establish know-your-customer (KYC) procedures for their U.S. customer base, which meant that their exchange served as a de facto money laundering platform and serviced up to $209 million in shady transactions.
BitMEX did eventually KYC all of its users in January 2021.
Delo’s lawyer, Patrick Smith, argued that Delo had personally banned hundreds of users from trading on BitMEX, but Delo confessed he wished he had acted sooner to ensure the exchange was no longer serving U.S. customers.
How the other BitMEX founders fared
In March, Samuel Reed joined Delo and Hayes and pleaded guilty to violating the Banking Secrecy Act. He faces a maximum jail sentence of five years.
Like Delo, Hayes was also put on probation, for two years, according to Bloomberg. Prosecutors initially sought to have him jailed for a year, but Hayes argued that his case could be a useful precedent in the future. He has been ordered to spend the first six months in home confinement.
Finally, Australian Bitcoin mogul Greg Dwyer, who is not a BitMEX co-founder, but who served as the exchange’s former head of business development, is currently negotiating with the New York federal court to extend his deadline for filing pre-trial documentation by a week, according to a report by The Sydney Morning Herald yesterday.
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